SSAB Commits €6 Billion to Hydrogen Shift as EU Considers ETS Rule Changes

Swedish steelmaker SSAB is investing €6 billion to convert its operations from coal to low-carbon hydrogen. The company said the spending rests on the assumption that the EU emissions trading system will continue to reward lower-emission production.

Helena Norrman, executive vice president of communications at SSAB, said companies that have not invested might actually get an advantage if the system is weakened.

The comment reflects concerns among several industrial firms that an upcoming EU proposal could soften carbon pricing rules. The EU Commission is scheduled to present its proposal on July 15. The changes are intended to align the ETS with the 2040 climate goal agreed last year.

The ETS has required heavy industries and power plants to buy CO2 permits since 2005 and currently covers about 40 percent of EU emissions. Carbon permits are trading at around €80 per metric ton, up from below €10 per metric ton in the 2010s. Goldman Sachs estimates that low-carbon industrial technologies begin to compete with conventional methods at around $100 per ton.

BASF, ArcelorMittal and thyssenkrupp sent a letter to EU leaders on June 16 calling for immediate action to halt the escalation of ETS-related costs. BASF has halved its emissions since 1990 through efficiency gains and fuel switching, yet stated that deeper cuts using low-carbon hydrogen and electrification are not yet economic.

Italy’s Giorgia Meloni and Poland’s Donald Tusk have argued that Europe’s green agenda is eroding industrial competitiveness.

Commission officials have signaled willingness to soften the scheme, for example by issuing additional free CO2 permits. Winston Beck, vice president of group public affairs at Heidelberg Materials, said the carbon price signal is necessary to make large-scale investments viable.